N-2023-3

Notice 2023-3 references longstanding regulations under § 61 that provide special valuation rules for employer-provided automobiles.  The amount that must be included in the employee’s income and wages for the personal use of an employer-provided automobile generally is determined by reference to the automobile’s FMV.  If an employer chooses to use a special valuation rule, the special value is treated as the FMV of the benefit for income tax and employment tax purposes.  Section 1.61-21(b)(4).  Two such special valuation rules, the fleet-average valuation rule and the vehicle cents-per-mile valuation rule, are set forth in § 1.61-21(d)(5)(v) and § 1.61-21(e), respectively.  These two special valuation rules are subject to limitations, including that they may be used only in connection with automobiles having values that do not exceed a maximum amount set forth in the regulations.

Notice 2023-3 will be in IRB: 2023-3, dated January 17, 2023